FRED jumps into pensions muddle

Do you find it confusing to work out how much pension you will get? It is hardly surprising when most of Britain's top companies are providing misleading information to investors about the true cost of funding pensions.

It will probably get worse, according to consulting actuaries Lane, Clark & Peacock.

A new accounting standard - FRED20 - soon comes into force which will only add to the confusion. Using it, BT would have reported profits of £250m a year less over the past two years because of the way it would have had to account for redundancy pensions.

LCP believes its regular reviews have forced some Footsie companies to shed more light on how they handle pension costs.

The worry is that unless companies come clean, their employees are being kept in the dark over whether enough is being set aside to cover their future pensions. Disclosure by 12 groups falls 'well short of the level required'.

The sinners are Abbey National, BP Amoco, P&O, Royal & Sun Alliance, Royal Bank of Scotland, Scottish Power, Sema, Wolseley, WPP, and Norwich and CGU ñ now merged into CGNU.